Carlito W Aceron Jr August 16, 2022

Tax 1 : Case 1
Commissioner of Internal Revenue vs Pineda
No. L-22734, September 15, 1967

FACTS:
Atanasio Pineda died, survived by his wife, Felicisima Bagtas, and 15 children, the
eldest of whom is Manuel B. Pineda, a lawyer. The estate was divided among and
awarded to the heirs which Atty Manuel Pineda share amounted to P2,500.00.
Bureau of Internal Revenue investigated the income tax liability of the estate and
it found that it has income tax deficiency which made Atty Pineda liable for the
total amount of P760.28. The latter argued that he is liable only to extent of his
proportional share in the inheritance.

ISSUE:
Can the Government require an heir to pay the full amount of the taxes assessed?

RULING:
Yes, an heir is liable but it cannot exceed the amount of his share. He is liable for
the assessment as an heir and as a holder-transferee of property belonging to the
estate-taxpayer. As an heir he is individually answerable for the part of the tax
proportionate to the share he received from the inheritance. As a holder of the
property belonging to the estate, he is liable for the tax up to the amount of the
property in his possession. The Government has a lien on such property. But after
payment of such amount, he will have a right to contribution from his co-heirs.
The Government has two ways of collecting the taxes in question:
1. By going after all the heirs and collecting from each one of them the amount of
the tax proportionate to the inheritance received; or
2. By subjecting said property of the estate which is in the hands of an heir or
transferee to the payment of the tax due the estate.
In this case, the BIR opted for the second remedy to collect the tax as it has the
discretion to avail the most expeditious way to collect the tax. Taxes are the
lifeblood of the government and their prompt and certain availability is an
imperious need.